Eric asks a good question:

As the New Deal abetted America's move from the countryside to the city, it also saved memories of the ways of life lost.

Are we truly in a similar transition now -- to a post-suburban world, to a post-paper world? What folkways do we want documented?

I don't think we fully understand or appreciate the social, economic, and political changes the information revolution revolution will bring. I will leave it to the historians to document these changes, and I'll talk briefly instead about how the advance of information and other technology will impact -- has already impacted -- our economic security.

Information is a key component of competitive markets. For example, if consumers do not have full information about location of alternative suppliers and the prices they are charging, the quality of their products, and so on, then the local seller will have some degree of monopoly power over local markets. There won't be any known, viable alternatives for consumers if the are dissatisfied.

Now, this monopoly power from lack of information is bad for economic efficiency, prices will be too high, quantities will be too low, and profit will be excessive (i.e. there will be non-zero economic profit). But from a stability perspective, the monopoly power and the excess profit it brings makes it more likely that the firm will survive, i.e. it is less likely that the firm's workers will face a spell of unemployment. Workers in a local monopoly are fairly secure.

In fact, this was the idea behind the banking reforms of the 1930s. Regulators impose restrictions such as not allowing banks to branch across state lines, controlling the price banks can pay on deposits to ensure a healthy spread on loans, etc. to reduce competition and hence reduce the chance the bank will fail As Paul Krugman notes, "Until the 1980s, banks rarely got in serious trouble because government regulation virtually insured their profitability."

The rise of information technology will make markets more efficient, i.e. less subject to market power, and this will happen on both local and global scales. The internet makes it much easier to find out where alternative suppliers are located, the prices they are charging, the quality of their products, in short, whether your market is local or global, your customers can find the competition far easier than ever before.

The effect of this is to make markets more dynamic, they adjust faster to changes in the price of inputs, resources are more mobile and can move internationally in response to more favorable conditions (and, of course, supporting technology such as container shipping and the ability to do what we view as simple things like sending a pdf by email contribute as well). As a result of this increased competition, firms are more likely to go out of business due to competitive pressures, and the degree of  "churning" in the economy increases.

While this may be great for the economy, it is not so great for those getting churned - the workers in these industries (I say may because systems can be over responsive and the lack of effective dampers - regulation is one type of damper - can lead to phenomena such as bubbles). The advance in efficiency, the ability to respond faster to economic shocks, all of these developments mean that workers are more likely to be unemployed as competitive forces cause their employer to scale back or go out of business, or the business moves in search of cheaper inputs elsewhere.

As we move toward a more dynamic and competitive economy due to advances in information and other technology - as we will continue to do once we get through our current economic difficulties - it will be essential that we build supporting institutions for workers who are displaced by the more flexible, responsive economy that comes along with it. So far, the institutions to support workers have not kept up, and it's time for that to change.